Biotech stocks collectively inched down Monday after President Donald Trump reiterated his concerns that U.S. drug prices are “out of control” during a Cabinet meeting, according to a number of reports.
[ibd-display-video id=2368152 width=50 float=left autostart=true]The president wants to bring U.S. drug prices in line with those in other countries, which tend to be lower, Bloomberg reported .
“The same exact drug by the same exact company, made in the same exact box and sold someplace else, sometimes it’s a fraction of what we pay in this country,” he said. “Meaning, as usual, the world is taking advantage of the United States.”
Trump’s comments come amid the rising likelihood he will enact an executive order to tug down drug prices in the U.S., Needham analysts Kevin Caliendo and Alan Carr wrote in a report Monday. They cited commentary from a Washington, D.C.-area health care policy watcher.
The expert, cited by Needham, says an executive order regarding drug prices could come “any day.” A proposed order was released in May but never signed and remains the blueprint, the analysts wrote in a note to clients.
IBD’S TAKE: Medical tech stocks have been a safe haven in 2017 as investors keep their distance from pharma, analysts say. The group is trending near record highs as the economy improves, allowing patients to get “pseudo-deferrable” procedures. Head to the Industry Snapshot for more on what that means for the group.
Lower drug prices would benefit customers, but cut into profits for drugmakers and biotechs. Drugs treating rarer diseases tend to cost more as companies aim to recoup the costs associated with lengthy and numerous clinical trials.
In afternoon trading on the stock market today , biotech stocks dipped 0.4%. Top biotechs Biogen ( BIIB ) and Gilead Sciences ( GILD ) fell 1% and 1.6%, respectively. Amgen ( AMGN ) dipped less than 1%. Biogen remains extended from a buy point. Gilead is trying to find support at its 50-day moving average while Amgen undercut a buy point.
Trump has been outspoken on bringing down drug prices since before he was sworn in as president. In December he said he doesn’t “like what has happened with drug prices.”
Following his inauguration, Trump called the drug industry “disastrous” and accused firms of “getting away with murder” based on how they price medicines. He also promised to create a competitive system to help bring down drug prices .
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